According to the decree, in order to benefit from this tax rate reduction scheme, landlords will have to communicate to the Tax and Customs Authority (TAA) the lease and changes through the delivery of the Model 2 declaration and to pay the Stamp duty.
Among the assumptions required to be covered by this tax benefit is also the obligation of the landlord to communicate to the tax authorities the identification of the lease in question, indicating the start date and its duration, as well as the subsequent contractual renewals and their duration, until February 15 of the following year.
In case of termination of the contract, the landlord must also notify the TAO of the date of termination, "and the indication of the reason for termination", and must do so by February 15 of the following year.
In addition to requiring "proof of assumptions", the right to reduce the IRS rate for long-term rentals imposes an obligation to prove the declared elements, which, according to the law, implies that landlords have the lease that right to the regime and proof of compliance with the delivery of the Model 2 declaration and the corresponding payment of the Stamp Duty.
In the absence of a written lease, it will be necessary for the landlord to have another document that proves the existence of the legal relationship of the lease and, if there is a termination of the lease, it will be necessary to be equipped with the corresponding document.
Among the various legislative measures that came into force this year with the aim of providing more security and stability to tenants and stimulating the execution of leases of longer duration include the reduction of the IRS rate according to the term of the contract.
In this way, a reduction of 2 percentage points in relation to the autonomous rate of 28% is applied to the property income of lease agreements with a duration equal to or greater than two years and less than five years.
And, "for each renewal of the same duration, a reduction of two percentage points shall be applied up to a limit of fourteen percentage points".
Already in the income of rent of contracts celebrated of duration of five years or less and less than ten years, the rate falls by five percentage points, to 23%, being that, for each renewal "with equal duration, a reduction of five percentage points up to fourteen percentage points ".
This rate reduction is 14 percentage points for contracts of more than 10 and less than 20 years, and 18 percentage points for leases with a duration of more than 20 years.
With the ruling published today, it seeks to prevent any abusive use of the tax benefit, that is, it seeks to prevent someone from starting a contract with a higher term to pay less than IRS, and to stop it without just cause before term.
On the side of the tenant it is always possible to terminate the contract before the deadline provided that the period of notice provided for in the law has expired.